SAN FRANCISCO--Microsoft trotted out some of its biggest customers on Tuesday to make its case that it still makes sense to spend money on software in a tough economy.

The gathering of invited corporate IT users here is designed to serve as the beginning of the business push for Windows 7, which is already available to larger businesses and goes on sale to consumers and small businesses on October 22.

A panel of Microsoft executives and customers talked about the pending launch of Windows 7 at an event in San Francisco on Tuesday.
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Among those already trying out Windows 7 is Intel. The chipmaker did a lot of work to make Windows Vista work, but like many companies, it decided not to put it on its own desktops.

By contrast, Intel is adopting Windows 7 rather quickly. Already about 500 employees from throughout the company are testing the software, said CIO Diane Bryant. Of those workers, 97 percent said they would recommend the operating system.

"It's a very strong pull," Bryant said.

Although a good business case can be made for upgrading our machines, it can still be a tough sell, said IDC analyst Al Gillen.

CEO Steve Ballmer presided over an event that was, effectively, the business launch of Windows 7.
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"The problem is it costs money to save money," Gillen said.

Microsoft CEO Steve Ballmer, who earlier Tuesday sent out an e-mail to customers arguing for "the new efficiency" driven by software, is slated to speak shortly at the event being held at the at the University of California, San Francisco's Mission Bay campus.

Update 9:55 a.m.: The panel has wrapped up and Ballmer has taken the stage. So far, we're hearing familiar talk about doing more with less and his case that technology is at the early stage of its influence on business.

10 a.m.: Ballmer starts his pitch for Windows 7.

Ballmer said his hope is that, once the new operating system hits the market, that individual workers will be going to businesses asking them to put Windows 7 on their corporate computers. "I think we are going to see a lot of that kind of demand," Ballmer said.

But, he acknowledged that alone won't sway businesses. "Even with that swell of interest, you are still going to have to confront the new efficiency."

There, he said, it will come down to whether Windows 7 really can make business workers more productive, something he clearly believes it can.

10:20 a.m. Ballmer has switched into the full-on sales pitch, highlighting the cost savings that can be achieved. Customers can expect to save $90 to $160 in costs each year per computer that they move onto Windows 7, largely from lower support and management costs. (It wasn't clear if this was as compared to a PC running XP or one running Windows Vista.)

Windows 7 can also make it cheaper to deploy new software, though Ballmer acknowledged that skeptics will point out the cheapest thing is just not to deploy new software at all. "I got that," Ballmer said.

Still, he said, it's a "very good place in the product cycle" to embrace Windows 7," Ballmer said, noting that businesses that move now would be early adopters, but not the first companies to do so, pointing to a list that included Ford, Fiat, BMW, Bombardier, Continental Airlines, Intel, Halliburton and Starwood.

Ballmer said he expects most companies will start moving to Windows 7 as they add new PCs, but won't do large-scale upgrades of existing machines and probably won't rush out to replace all their PCs either.

10:30 a.m.: On to questions and answers. Microsoft starts with a few written ones that came in over the Internet. First off: No, Ballmer is not free for golf next Monday--he'll be in London.

10:32 a.m.: Well, he took a couple more written questions but no live questions from the audience before the event wrapped up.

About the author

During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina.
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